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38. Related Party Transactions

For the purpose of these Consolidated Financial Statements parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operational decisions as defined by IAS 24 Related Party Disclosures. Related parties may enter into transactions which unrelated parties might not, and transactions between related parties may not be effected on the same terms, conditions and amounts as transactions between unrelated parties.

The Group has applied the exemption as allowed by IAS 24 not to disclose all government related transactions, as the parent of the Company is effectively being controlled by the Russian Government. The table below summarises transactions in the ordinary course of business with either the parent company or associates and joint ventures.

The Group enters into transactions with related parties based on market or regulated prices. Short-term and long-term loans provided as well as debt are based on market conditions available for not related entities.

As of December 31, 2014 and 2013 the outstanding balances with related parties were as follows:

Transactions with Key Management Personnel

For the periods ended December 31, 2014 and 2013 the Group recognized RUB 1,420 million and RUB 1,181 million, respectively, as compensation for key management personnel (members of the Board of Directors and Management Committee). The compensation consists of salaries, bonuses including SAR and other contributions.